When is a completely free market bad?

[lu_hawk]

The example where even an economist would tell you a free market is bad is any type of scenario that would lead to a "tragedy of the commons" situation. 

 

You have a resource that is sufficient to sustain a population, or a region, or a nation, etc.  If the resource is well-regulated then this resource will last indefinitely, and everyone will prosper.  The resource is sufficient to meet everyone's basic needs, and can provide for a little more and produce a comfortable lifestyle.  And if everyone exploits the resource just to attain a comfortable lifestyle, then it will last indefinitely.  But self-interest dictates that most people are going to want to take a little more than what they need for a comfortable lifestyle, so they can have the nicest car on the block.  And seeing this, everyone else starts grabbing more, before it runs out.  Which just feeds on itself and escalates.  And pretty soon, the resource that could have lasted indefinitely is now gone and everyone is poorer for it.  This can be avoided with government regulation, but without regulation it's nearly inevitable that the resource will be quickly depleted.

 

The classic example is a fishery.  Without regulation of how many fish can be caught, and general management of the fishery, the fishery will be depleted.  But with regulation, the fishery may be sustained for a long time. 

[rkbabang]

The example where even an economist would tell you a free market is bad is any type of scenario that would lead to a "tragedy of the commons" situation. 

 

You have a resource that is sufficient to sustain a population, or a region, or a nation, etc.  If the resource is well-regulated then this resource will last indefinitely, and everyone will prosper.  The resource is sufficient to meet everyone's basic needs, and can provide for a little more and produce a comfortable lifestyle.  And if everyone exploits the resource just to attain a comfortable lifestyle, then it will last indefinitely.  But self-interest dictates that most people are going to want to take a little more than what they need for a comfortable lifestyle, so they can have the nicest car on the block.  And seeing this, everyone else starts grabbing more, before it runs out.  Which just feeds on itself and escalates.  And pretty soon, the resource that could have lasted indefinitely is now gone and everyone is poorer for it.  This can be avoided with government regulation, but without regulation it's nearly inevitable that the resource will be quickly depleted.

 

The classic example is a fishery.  Without regulation of how many fish can be caught, and general management of the fishery, the fishery will be depleted.  But with regulation, the fishery may be sustained for a long time. 

 

The vast majority of the 'commons' are enforced as such by governments. The solution to the tragedy of the commons is private ownership.

 

I call myself an anarchist, but I am open to the possibility that I am wrong and some rare situations may call for collective violence (i.e. government).  But these situations, if they exist, should be rare and should be treated with extreme caution and skepticism by all.  Similar to defensive shootings, yes they are sometimes necessary, but they are rare and should always be treated first as a murder investigation.  Our modern states and the people who inhabit them treat government violence as a go-to solution for any and all problems and even things that aren't problems but just "nice to haves".  People have an almost religious view of government as the savior, to the point that they are willing to sign up and die to support the bottom line of the defense industry.  This probably stems from the fact that the government has run the education system for generations.

 

[turar]

How about the law that only one cable company is allowed per township/city?  Cities and townships get to decide which single provider will be the company of choice for citizens.  If the city council or township doesn't choose you then you can't provide services.  Cable is notorious with this.  They began this practice initially as a way by saying they could only run wire to customers in a township if a township gives them exclusive rights.  Google "Cable Franchise Agreement" for more information, this is rampant in the Midwest and Eastern US.

These seem to be contracts/agreements, not laws though? First result for me is for Colorado Springs, and agreement they have is with 3 different companies.

[turar]

If someone calling himself an "IRS tax collector" telling me I need to give money to his organization with an implied "or else", is the equivalent of someone else wearing a ski-mask and explicitly pointing a gun in my face demanding my wallet. 

But someone wearing a ski-mask didn't build the road you were driving on, or provided a handy phone number to dial in case someone like him was trying to rob you, and so forth.

[rkbabang]

If someone calling himself an "IRS tax collector" telling me I need to give money to his organization with an implied "or else", is the equivalent of someone else wearing a ski-mask and explicitly pointing a gun in my face demanding my wallet. 

But someone wearing a ski-mask didn't build the road you were driving on, or provided a handy phone number to dial in case someone like him was trying to rob you, and so forth.

 

Would it make you feel better if the guy who robbed you kept some for himself, but gave most of it to your favorite charity?  I would still consider myself to have been the victim of a crime regardless of what my attacker later did with my money.  If I want to spend my money on a product, service, or charity I am perfectly capable of making those decisions on my own.  And even if I wasn't capable, that would be my problem, no one would have the right to use violence against me to make the decisions that they think are correct.

 

By the way, you do realize that you are using the "protection racket" argument.  Sure Vinny will break my legs if I don't pay him, but he keeps the neighborhood safe and free of drug dealers, so all the merchants should be happy to pay their fair share.

 

[rukawa]

Self regulation is an unconvincing argument to me.  Humans don't have a very impressive track record with that.

 

So are you proposing that Britain should regulate the United States? Because the United States regulating the United States is self-regulation just as much as a corporation regulating its own behaviour is self-regulation.

[rukawa]

The FDA has sickened & killed more people (through both its actions and inactions) than a free market in food and drugs ever would.

 

Evidence? The free market history of medicine is a history of butchers, crackpots, charlatans and patent medicines filled with arsenic and cynaide. Medicine before the 20th century was ridiculously bad. Food and waterborne illnesses were enormously prevalent. And the government did an incredible amount of good by improving public health.

[yadayada]

most people were not educated, and there wasnt a information high way like you have now. And I think he means he doesnt want any government regulating in general.

 

If you make a drug now that does something bad, your company will get destroyed in the media and all over the web, and you go out of business really fast. Especially without regulation. Before there are like 10 deaths, everyone will know about it, and that company will not make another dime. And in the old days, people thought smoking was good for you, and the earth was flat. So I dont think the two compare.

 

Most of these problems you mention were fixed by science, and people becoming smarter and being able to more easily communicate over larger distances. Also being able to actually read, and being able to look up everything on the internet really helps.  Not by government regulation. That only really kicked in after world war 2.

 

Besides most foods are god awefull right now. Half the stuff in the supermarket will help you into an early grave. And I remember that with protein powder you have to look up the ingredients yourself in the US, because they can still put a lot of stuff in it. As long as it is not banned by the FDA. It is probably easy to find some protein shake out there that greatly increases risk of cancer. And I bet in 50 years we will find out a lot of processed food is a lot worse for you then we now think.

[rkbabang]

Self regulation is an unconvincing argument to me.  Humans don't have a very impressive track record with that.

 

So are you proposing that Britain should regulate the United States? Because the United States regulating the United States is self-regulation just as much as a corporation regulating its own behaviour is self-regulation.

 

I think he must be proposing that humans be regulated by some non-human species?  But as far as I know, all governments have been made up entirely of human beings.

 

[turar]

By the way, you do realize that you are using the "protection racket" argument.  Sure Vinny will break my legs if I don't pay him, but he keeps the neighborhood safe and free of drug dealers, so all the merchants should be happy to pay their fair share.

I'm not sure I can exactly picture the logistics and practicality of the society you're advocating. How is it going to work in practice? You can be as individualistic and all about self-defense as you want, until others decide to gang up on you and take all your stuff. Then you'd have to team up with somebody else for more protection. Until an even larger group of others organize and gang up on you again. So this is basic primitive stone-age society type stuff. Beyond that, you're back to square one, with elected "elders" or what not, and yes, a basic form of taxation for common protection. I just don't get how you get to your utopian society practically.

[rukawa]

I'm not sure I can exactly picture the logistics and practicality of the society you're advocating.quote]

 

http://en.wikipedia.org/wiki/Anarcho-capitalism

[yadayada]

yeah I think you still need laws... That is not really what this is about. A free market implies that you are free to choose yourself, a long as you dont hurt others while doing it.

 

Like you are free to drive an unsafe car. But if you kill someone, the law will punish you more harshly.

 

The government cant act as some mafia and forcefully take money from you, but they can lock you up, and use the police if you break laws if you hurt others (or destroy the enviroment for that matter). Because if you destroy the enviroment you are indirectly hurting others (eg no more fish or bad air polution).

 

But sometimes you get into grey areas here.

[turar]

http://en.wikipedia.org/wiki/Anarcho-capitalism

Sorry, still not clear at all. E.g. section on "Law and order and the use of violence" basically says that anarcho-capitalists can't even agree on what they want really. If you do want a "centralized court", per Rothbard, then it seems somebody has to pay for it. What if some groups decide to pay for it through "voluntary" tax, but others reject it, do you force the others? What if other groups then proceed with acts of aggression, in your interpretation, but fair acts in their interpretation? What court are they subject to? Same questions apply if there is no "centralized" court.

 

And this quote was lovely: "The defense of those unable to pay for such protection might be financed by charitable organizations."  :D

[JSArbitrage]

People have an almost religious view of government as the savior.

 

No, they don't.  In fact, I'd argue that extreme anti-government individuals tend to be the ones that use "religious" or dogmatic arguments against the state.  I think the average person understands that government is a necessity in a modern society.  In fact, if you ran a worldwide regression between happiness of a population and the size of government as a percent of GDP, you'd probably see a pretty strong correlation that more government is better.

 

Now, as an American in the South, I am no proponent of big government.  But I also think extreme anti-government types basically have the perspective of a wealthy teenage girl complaining about her parents - biting the hand that feeds because they are too bratty to imagine the real alternative (hint: government-less states tend to be awfully crappy.) 

 

If you want to discuss the problems of "big government" such as the NSA dragnets, I am all ears.  But if you are going to argue against the FDA, I think even a casual reading of society before that kind of regulation would do you some good.  People used to get some snake-oil made in bathtubs that were allegedly "cure-alls."  And it's because sick, diseased people would be willing to drink mercury by the gallon if they thought it made them healthy.

[rkbabang]

http://en.wikipedia.org/wiki/Anarcho-capitalism

Sorry, still not clear at all. E.g. section on "Law and order and the use of violence" basically says that anarcho-capitalists can't even agree on what they want really

 

Yes, you are correct. Unlike advocates of government who all always agree on what they all want.  Last time I saw a political debate it was all hugs and kisses all around.

 

It isn't a matter of whether or not human beings can self-regulate, we have no other choice.  As far as we know we are the only intelligent sapient species in the universe (like I said, as far as we know).  Human beings are all there is right now.  We can act alone or in groups.  We can act peacefully or violently.  Most of us agree that if a human is attacked he can use violence to defend himself and that is OK.  What we are discussing here is the theory (the overwhelmingly popular theory) that human beings can form into groups and a majority can vote to use intragroup violence against a minority, as well as intergroup violence against other such groups who have done nothing violent to provoke it.

Governments are simply groups of human beings trying to self regulate themselves and others using aggressive, unprovoked violence and theft.

[lu_hawk]

The example where even an economist would tell you a free market is bad is any type of scenario that would lead to a "tragedy of the commons" situation. 

 

You have a resource that is sufficient to sustain a population, or a region, or a nation, etc.  If the resource is well-regulated then this resource will last indefinitely, and everyone will prosper.  The resource is sufficient to meet everyone's basic needs, and can provide for a little more and produce a comfortable lifestyle.  And if everyone exploits the resource just to attain a comfortable lifestyle, then it will last indefinitely.  But self-interest dictates that most people are going to want to take a little more than what they need for a comfortable lifestyle, so they can have the nicest car on the block.  And seeing this, everyone else starts grabbing more, before it runs out.  Which just feeds on itself and escalates.  And pretty soon, the resource that could have lasted indefinitely is now gone and everyone is poorer for it.  This can be avoided with government regulation, but without regulation it's nearly inevitable that the resource will be quickly depleted.

 

The classic example is a fishery.  Without regulation of how many fish can be caught, and general management of the fishery, the fishery will be depleted.  But with regulation, the fishery may be sustained for a long time. 

 

The vast majority of the 'commons' are enforced as such by governments. The solution to the tragedy of the commons is private ownership.

 

 

 

Private ownership IS a form of government regulation.  Who determines who owns what?  Who enforces property rights?  If the government collapsed tomorrow, what would happen to your private property?  Private property only exists where a government says it exists.

 

In the fishery example, you give people "shares" of the fishery that can be exploited personally, or that can be bought and sold.  The fishery is now "privately owned."  This has been done, and there are examples of this type of scheme working very well in ensuring the long-term health of the fishery and in maximizing the economic value obtained.

 

It's "private ownership" but it's still a form of government regulation, as all "private ownership" is.

[rkbabang]

The example where even an economist would tell you a free market is bad is any type of scenario that would lead to a "tragedy of the commons" situation. 

 

You have a resource that is sufficient to sustain a population, or a region, or a nation, etc.  If the resource is well-regulated then this resource will last indefinitely, and everyone will prosper.  The resource is sufficient to meet everyone's basic needs, and can provide for a little more and produce a comfortable lifestyle.  And if everyone exploits the resource just to attain a comfortable lifestyle, then it will last indefinitely.  But self-interest dictates that most people are going to want to take a little more than what they need for a comfortable lifestyle, so they can have the nicest car on the block.  And seeing this, everyone else starts grabbing more, before it runs out.  Which just feeds on itself and escalates.  And pretty soon, the resource that could have lasted indefinitely is now gone and everyone is poorer for it.  This can be avoided with government regulation, but without regulation it's nearly inevitable that the resource will be quickly depleted.

 

The classic example is a fishery.  Without regulation of how many fish can be caught, and general management of the fishery, the fishery will be depleted.  But with regulation, the fishery may be sustained for a long time. 

 

The vast majority of the 'commons' are enforced as such by governments. The solution to the tragedy of the commons is private ownership.

 

 

 

Private ownership IS a form of government regulation.  Who determines who owns what?  Who enforces property rights?  If the government collapsed tomorrow, what would happen to your private property?  Private property only exists where a government says it exists.

 

In the fishery example, you give people "shares" of the fishery that can be exploited personally, or that can be bought and sold.  The fishery is now "privately owned."  This has been done, and there are examples of this type of scheme working very well in ensuring the long-term health of the fishery and in maximizing the economic value obtained.

 

It's "private ownership" but it's still a form of government regulation, as all "private ownership" is.

 

Private ownership exists only if government says it exists?  Yes, because they are magic.  Or is it because they hold their superhuman powers by the grace of god?  I guess we've made a little progress since the days of building pyramids for the god-kings, but not much apparently.

[rkbabang]

To clarify my above post a little bit for people unaccustomed to thinking about the nature of government and where it gets its "powers" from.  The only reason that property exists only when the government says it does, isn't because of any supernatural quality of the group calling itself the government, but because that is what the norms of our society are. The non-government people in society vastly outnumber the government members.  If the norms and mores of our society were such that no person or group could steal and initiate force, than the government in its current form could not exist, but there could just as easily be other norms and mores that dictate how we claim property and transfer titles, etc.  Maybe a peaceful organization(s) would be responsible for keeping the records and paid to do so.  There is nothing inherent about property ownership which says that it needs to be registered with an organization which survives by theft in order to be generally recognized as legitimate by a civilized society.  Of course as you can see by the fact that these things never crossed your mind that this violence based organization gains incredible advantages by taking all of the children in society every day for 12 of their most formative years and "educating" them.  The things I'm saying can't even register in the minds of most people as anything but insane.

[RichardGibbons]

The things I'm saying can't even register in the minds of most people as anything but insane.

 

That's because they are insane. 

 

I'll plagiarize a post on Reddit a while back as the counter argument.  What will happen is that I will beat you up when are walking down the street and steal all your stuff.  I may kill you, or not.  Let's assume that, irrationally, I don't kill you.  Then you'll probably want to band together with other people to ensure I don't beat you up again.  Well, then I'll probably just want to find more people and build better weapons so that I can beat you up and take your stuff once more.  As I increase my power, you might want to do the same.

 

So, we'll have these armies dedicated to keeping ourselves safe.  We'll pay them with money levied on everyone who is protected by them.  Pretty soon, it will become evident what the best army is, and other armies will get killed off.  The people running the army will realize they can do a lot of good by, say, having a fire department or a police force stopping people within the winning group from killing each other, or courts to enforce property rights, and so will enact that. And presto, we'll have government and taxation.

 

And then someone will stand up and say, "This government is violent. If we get rid of them, everyone will hold hands and magically never want to commit violence against each other to get ahead, and the world will be Nirvana".

 

The other question is, why don't you emigrate to Mogadishu, where this sort of environment seems to exist, rkbabang?  It seems to fit your philosophy perfectly.  (This is actually a serious question.  I suspect your answer is "Mogadishu isn't what I am proposing", but I'm curious why you believe it isn't.  The people themselves decide issues like property rights and survival, unrestricted by the onerous constraints of a violent government.)

[sys]

why, or how, is the assertion of property rights over natural resources not also an example of violence done to those individuals excluded from using those resources?

 

i don't think i understand the distinction that categorizes government as violence imposed on individuals but does not categorize private ownership of natural resources in the same manner.

[Otsog]

Self regulation is an unconvincing argument to me.  Humans don't have a very impressive track record with that.

 

So are you proposing that Britain should regulate the United States? Because the United States regulating the United States is self-regulation just as much as a corporation regulating its own behaviour is self-regulation.

 

I think he must be proposing that humans be regulated by some non-human species?  But as far as I know, all governments have been made up entirely of human beings.

 

Wow, I don't think either of you could be more pedantic if you tried. 

[yadayada]

it was a very stupid (or troll) question tho. It was very obvious he meant no government should do these things, instead of some foreign government.

[rkbabang]

The things I'm saying can't even register in the minds of most people as anything but insane.

 

That's because they are insane. 

 

I'll plagiarize a post on Reddit a while back as the counter argument.  What will happen is that I will beat you up when are walking down the street and steal all your stuff.  I may kill you, or not.  Let's assume that, irrationally, I don't kill you.  Then you'll probably want to band together with other people to ensure I don't beat you up again.  Well, then I'll probably just want to find more people and build better weapons so that I can beat you up and take your stuff once more.  As I increase my power, you might want to do the same.

 

So, we'll have these armies dedicated to keeping ourselves safe.  We'll pay them with money levied on everyone who is protected by them.  Pretty soon, it will become evident what the best army is, and other armies will get killed off.  The people running the army will realize they can do a lot of good by, say, having a fire department or a police force stopping people within the winning group from killing each other, or courts to enforce property rights, and so will enact that. And presto, we'll have government and taxation.

 

And then someone will stand up and say, "This government is violent. If we get rid of them, everyone will hold hands and magically never want to commit violence against each other to get ahead, and the world will be Nirvana".

 

The other question is, why don't you emigrate to Mogadishu, where this sort of environment seems to exist, rkbabang?  It seems to fit your philosophy perfectly.  (This is actually a serious question.  I suspect your answer is "Mogadishu isn't what I am proposing", but I'm curious why you believe it isn't.  The people themselves decide issues like property rights and survival, unrestricted by the onerous constraints of a violent government.)

 

Oh boy, it was only a matter of time before someone mentioned Somalia.  (At least no one has brought Hitler into it yet).  The fact is though that they are better off now than they were back when they did have a U.N. sanctioned government by almost every metric you can come up with.  It isn't the government that makes a people civilized it is their culture.  You can give the people of Somalia a democracy and it will likely deteriorate into a worse mess than it is now.  This is why "nation building" does not work, if the culture could support a civilized society it would already be a civilized society.  It isn't our form of government that makes us civilized, quite the opposite, it is our civilized culture that prevents our government from being as corrupt and brutal as some others.  We keep them in check, not the other way around. You are putting the cart before the horse.

 

[rkbabang]

Self regulation is an unconvincing argument to me.  Humans don't have a very impressive track record with that.

 

So are you proposing that Britain should regulate the United States? Because the United States regulating the United States is self-regulation just as much as a corporation regulating its own behaviour is self-regulation.

 

I think he must be proposing that humans be regulated by some non-human species?  But as far as I know, all governments have been made up entirely of human beings.

 

Wow, I don't think either of you could be more pedantic if you tried. 

 

Sorry, but you and many here speak of these groups of human beings as if they are something more than a group of human beings.  I'm simply trying to point out that they are not.  There is nothing magical about a group of humans using force to control other humans.  There is nothing about one set of human beings that makes them more able to govern others than those others are to govern themselves.  There is nothing pedantic about pointing out that your comment that human beings can't self-govern, but groups of human beings calling themselves government can, is circular reasoning.  If human beings are unable to govern themselves they are certainly unable to govern others.  If human beings are unable to govern themselves, they are certainly unable to choose what other human beings should govern them.

[Otsog]

You and many others think that, I and many others don't.  I think self interest incentives mean that some sets of human beings are better at regulating.  It is not an inherent trait some humans posses, it is inherent based on situations.  Humans are extremely prone to fraudulent activities under the right set of circumstances, I think relying on everyone to individually regulate themselves in every single facet of their lives would be just about the most inefficient thing that could ever happen, it would be exhausting.  Not that the current situation is amazing or anything, just that I think a balance is more ideal.  I think the worst situations would be the two at either extremes of the spectrum.

 

Self regulation, self policing is a concept in economics and business.  It does not mean 'any human(s) monitoring any human(s) being in any capacity ever' like you are implying.